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Cachaça is mostly produced in Brazil, where, according to 2007 figures, 1.5 billion litres (390 million gallons) are consumed annually, compared with 15 million litres (4.0 million gallons) outside the country. It is typically between 38% and 48% alcohol by volume. When it is homemade it can be as strong as the distiller wants. Up to six grams per litre of sugar may be added." The major difference between cachaça and rum is that rum is usually made from molasses, a by-product from refineries that boil the cane juice to extract as much sugar crystal as possible, while cachaça is made from fresh sugarcane juice that is fermented and distilled. As some rums are also made by this process, cachaça is also known as Brazilian rum.
In the beginning of the seventeenth century, the producers of sugar in various European colonies in America started to use the by-products of sugar, molasses and scummings, as the raw material for the alcoholic beverage which in British colonies was named rum, in France's tafia, in Spain's aguardiente de caña and in the Portuguese (Brazil) aguardente da terra, aguardente de cana and later cachaça. 
Figures from 2003 indicate 1.3 billion litres of cachaça are produced each year though only 1% of this production is exported (mainly to Germany). Outside Brazil, cachaça is used almost exclusively as an ingredient in tropical drinks, with the caipirinha being the most famous cocktail.
There are two types of cachaça: artisanal and industrial.
Cachaça, like rum, has two varieties: unaged (white) and aged (gold). White cachaça is usually bottled immediately after distillation and tends to be cheaper (some producers age it for up to 12 months in wooden barrels to achieve a smoother blend). It is often used to prepare caipirinha and other beverages in which cachaça is an ingredient. Dark cachaça, usually seen as the "premium" variety, is aged in wood barrels and is meant to be drunk straight (it is usually aged for up to 3 years though some "ultra premium" cachaças have been aged for up to 15 years). Its flavour is influenced by the type of wood the barrel is made from..
There are very important regions in Brazil where fine still pot cachaça is produced such as Salinas in Minas Gerais state, Paraty in Rio de Janeiro state, Monte Alegre do Sul in São Paulo state and Abaíra in Bahia state. Nowadays, cachaça's producers can be found in most Brazilian regions and in 2011 there were over 40,000 of them.
For more than four centuries of history, cachaça has accumulated synonyms and creative nicknames coined by the Brazilian people. Some of these words were created for the purpose of deceiving the supervision of the metropolis in the days when cachaça was banned in Brazil; the beverage was competing with a European distillate called grapa. There are more than two thousand (2,000) words to refer to the Brazilian national distillate. Some of these nicknames are: abre-coração (heart-opener), água-benta (holy water), bafo-de-tigre (tiger breath), and limpa-olho (eye-wash).
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